The deadline to file your income-tax returns is a couple of months away – December 31, 2021. But it is good to get started early. If you missed reading Moneycontrol’s income-tax filing guide, we’ve put together the five most pertinent aspects about tax filing.
Why is it important to select the right income-tax return form?
Depending on the category you fall into, there are seven Income Tax Return (ITR) forms for you to choose from for filing your return. For the assessment year 2021-22 (financial year 2020-21), ITR-1 (Sahaj) and ITR-2 are the most relevant forms in the case of salaried individuals. Filing a wrong ITR form will result in your returns being held invalid.
I had forgotten to submit investment proofs to my employer in January. Can I claim these deductions while filing returns?
Yes. The deadline set by employers for submitting investment declarations to avail of deductions under section 80C, 80D, 80E and so on is January or February. However, despite multiple reminders from employers, many tend to skip submission of proofs for tax-saver investments. As a result, a higher amount of tax is deducted from the salary during the last three months of the financial year. If you missed submitting the proofs, you can enter the details in your tax return form and claim the deductions and tax refund.
What are the most common errors made while filing income-tax returns?
Small errors made when filing income-tax returns can make your returns null and void. These errors could be as simple as not choosing the right assessment year. Remember, you will be filing income tax returns for the financial year 2020-21 and, thus, assessment year 2021-22. You must also double-check your bank account details. Entering incorrect details could lead to a delay in getting your tax refund.
This assessment year is when the alternative tax regime will become effective. Salaried tax-payers can choose between the old, with-tax-benefits regime and the new system even at the time of filing returns. You will also have to declare your dividend income in the tax return forms this year.
What if I forget to disclose some income that I had earned? Will the income-tax department send me a notice?
It’s possible that some of us forget to disclose certain incomes, even if unintentionally. This is the case particularly with salaried individuals who rely on their Form 16, which does not contain details of capital gains, fixed or savings deposit interest incomes, for instance. If the income tax department detects this missing income, you could end up getting a notice.
Do I need to complete the verification process after filing tax returns?
Yes. Simply because filing won’t be considered complete until you verify the returns. This must be done within 120 days of having filed your ITR. But many forget to do so even though the electronic process can be completed in a matter of minutes. You can also download the ITR-V, or acknowledgement form and send it physically to the tax department’s CPC office in Bengaluru.
Should I opt for the e-verification process or the physical mode?
It is best to take the online route. The physical process is more laborious – you have to download, print and sign the hard copy before sending it to the Income Tax CPC, Bengaluru, by post. On the other hand, e-verification takes just a few minutes. You can use Aadhaar-OTP or your internet banking account, your pre-validated bank or demat account to generate an electronic verification code (EVC) to complete the process.
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